– Muhibbah Engineering (MUHI MK; RM1.00, SELL) – Sell into strength.
– KNM Group (KNMG MK; RM0.71, BUY) – Buyers may surface near support trend line.
– KPJ Healthcare (KPJ MK; RM5.13, BUY) – More room to the upside.
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Muhibbah Engineering (MUHI MK; RM1.00) – SELL
FY10P/E: 5.4x, P/BV: 0.9x
• Since the uptrend reversed in June, the stock has been making lower lows pattern over the past few months. Despite all these consolidation movements, it has yet to show any signs of bottoming.
• The technical landscape is a reflection of the price pattern. MACD stays in the red while RSI also dips into the negative territory. The formation of another black candle today is likely drift the stock towards the RM0.92 support trend line.
• Although technical rebound is likely to take place, we would stay on the sidelines until we see a more persistent based-building trend. Any bounce towards the RM1.03-RM1.08 resistances is an opportunity to take profits.
Muhibbah Engineering is an investment holding company which provides civil, marine, and structural engineering contract works. Through its subsidiaries, it also manufactures engineering products and distributes and markets construction materials. Muhibbah also repairs and builds ship, produces and leases cranes, trades computer hardware, and invests in properties.
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KNM Group (KNMG MK; RM0.71) – BUY
FY10P/E: 8.9x, P/BV: 1.4x
• Over the medium-term, KNM is trapped in a descending triangle pattern. However, daily chart suggests that buyers may surface near the RM0.69 support trend line, and may offer opportunities to make some quick buck.
• Although technical landscape is still weak, we may see some technical rebound taking place soon. As long as RM0.69 support holds firm, we see limited downside risk in the near-term.
• Traders with greater risk appetite may start to nibble now and ride the potential recovery phase. However, a stop loss at RM0.68 is a must. Resistance is at RM0.745 and RM0.81.
KNM Group Berhad is an investment holding company. Through its subsidiaries, the company designs, manufactures, and maintains process equipment, pressure vessels, heat exchangers, skid mounted assemblies, process pipe systems, storage tanks, specialized structural assemblies and module assemblies for the oil, gas and petrochemical industries.
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KPJ Healthcare (KPJ MK; RM5.13) – BUY
FY10P/E: 10.2x, P/BV: 1.8x
• KPJ is making a based-building formation over the past few days after its recent breakout. Once this sideways consolidation ends, we may see further upward swing. Next resistance is seen at RM5.35 and RM5.45.
• Bearish divergence on its MACD shows that follow through momentum is fading. However, as long as prices hold firm above the key SMAs, we see no reason to panic.
• Any technical pullback towards the RM4.90 resistance-turned-support line or the 30-day SMA is a chance to buy. Keeps stop tight near the 50-day SMA. Buy on weakness.
KPJ Healthcare Berhad is an investment holding company. Through its subsidiaries, the company operates specialist medical centers and also provides pathology and laboratory services, hospital management services, drug and medical distribution along with operating a nursing college.
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